SARATOGA SPRINGS -- Major players in the dairy industry are to blame for a dramatic decline in small upstate New York family farms, a report says.

From 1982 to 2007, New York lost almost 65 percent of its dairy farms, which the Washington, D.C.-based group Food & Water Watch blames on an alleged arrangement between Dean Foods, the nation's biggest milk processor, and Dairy Farmers of America, the largest milk handler. The findings are explained in the group's study, "The Economic Cost of Food Monopolies."

However, some farmers say the trend toward fewer but larger dairy herds is simply a question of economies of scale.

"I don't think that Dean Foods or Dairy Farmers of America are the reason for larger farms," said David Wood, owner of Eildon Tweed Farm in Charlton. With 1,050 milk cows, it's one of Saratoga County's largest dairies.

"The more cows you have, the more costs are spread out, so you can produce milk at a lower cost," he said. "The consumer is the one that benefits."

Profit margins, per animal, are so slim that the only way farms can make money is to increase the size of their herds, said dairy farmer and Northumberland Supervisor Bill Peck. Welcome Stock Farm, in which he's a partner, has more than quadrupled, from 140 milk cows in 1991 to 650 now.

"We'd all like to go back 100 years to when every small farm had 30 cows," he said. "There were a lot less headaches. But that's impossible with the business environment we're in now."

Younger generations couldn't stay involved and make a living if farms didn't add more cows, he said.

The report also found that the number of milk-processing plants in New York fell almost in half, from 61 in 1992 to 37 in 2007, and that other large dairy product manufacturing plants closed over the past decade. The declining number of plants made dairy farmers more dependent on fewer milk-processing companies and fewer, larger milk handlers, the study says.

However, the report only focused on New York state, one of five separate case studies that show how the concentration of economic power can harm both farmers and consumers in different agricultural sectors. Other studies dealt with poultry production on Maryland's Eastern Shore; organic soymilk production and organic soybean farming; and the California processed fruit and vegetable industry.

"The consolidation of the food and farm sector is sucking the economic vitality out of rural America and shipping it off to Wall Street," Food & Water Watch Executive Director Wenonah Hauter said. "These findings shine a much-needed light on the negative economic impact that farm and agribusiness monopolies have on farmers, consumers and rural communities."

New York State Agriculture Commissioner Darrell Aubertine, an active dairy farmer, declined to comment on the report, spokesman Joseph Morrissey said.

Former Commissioner Patrick Hooker is now Empire State Development Corp.'s senior director of industry development-agribusiness.

"I don't think the premise of the report is accurate," he said.

The trend toward fewer, bigger dairy farms is nationwide and not confined to areas served by Dean Foods and Dairy Farmers of America, he said.

Some processing plants closed because they were simply too old and failed to modernize, Hooker added.

"When you manufacture something in a capitalist society, you've got to be as efficient as possible," he said. "It's just one of those realities."

Dairy Farmers of America is a farmer-owned cooperative.

Brad Keating, senior vice president of DFA's eastern fluid group, said, "The dairy industry has changed dramatically over the past 20 years and continues to consolidate. Over the years, we have partnered with regional cooperatives, enabling all farmers to do better in the current environment where there are fewer and larger plants.

"We believe the milk marketing structure created in the Northeast -- one that enables dairy farmers to work together to market milk -- has benefited all dairy farmers. In fact, the activities of DFA and other affiliated milk marketing cooperatives in the Northeast have improved the overall business climate for cooperative members and independent farmers alike."